'Digging out' from LA/Long Beach strike may go faster than expected

Thursday, December 06, 2012

It may take less time for the ports of Los Angeles and Long Beach to dig out from the backlog cargo from last week's dockworkers' strike than some had feared.
Philip Sanfield, a spokesman for the Port of Los Angeles, said that overall process may end up being measured in days rather than weeks.
He said the huge size of the two ports - their terminals, workforce, railroad infrastructure and large number of truckers - give them a great deal of "cargo bandwidth," which should help quickly work off the cargo backlog.
International Longshore and Warehouse Union International Vice President Ray Familathe said with the end of the strike by members of Local 63 Office Clerical Unit, some 10,000 longshoremen who honored the picket lines by the clerks are now back to work at the port.
Alan McCorkle, manager of APM Terminals' Pier 400 facility in Los Angeles, said congestion will be relieved, in part, by the decision by some carriers to bypass the port and either leave cargo at other ports, or change their rotations.
According to the Marine Exchange of Southern California, 18 ships were diverted from the ports during the strike. Three had returned by Wednesday and another five were due to return by Dec. 10 and two next month.
Others ships offloaded cargo in Mexico and McCorkle expects most of that will be loaded aboard other ships and brought back Los Angeles. That will spread out the volume of diverted cargo as it filters back to the port over a week or two. He expects his terminal, for example, may see about 10 percent more cargo as the diverted cargo returns.
The Port of Long Beach said Wednesday the three of its terminals closed by the work stoppage will have some cargo fees waived to provide financial relief and to expedite the movement of containers.
“We are relieved to return to full operations and we want to do our part in getting things back to normal as soon as possible,” said Port of Long Beach Executive Director J. Christopher Lytle, in a statement. “Hundreds of thousands of jobs are dependent on our local ports, so the work now begins to clear the backlog and to get our economic engine humming again.”
Ports assess fees on cargo containers that linger on its terminals beyond a certain grace period. Importers, exporters or their agents should contact service providers such as ocean carriers or terminal operators for more details on cargo fees, the Port of Long Beach recommended.
“What we want to do is minimize the impact of the closure on our customers,” Lytle said. “We will continue working closely with all the stakeholders for a smooth transition to normal operations.”
Paul Bingham, an economist at CDM Smith, said if terminals bring on additional casual workers or run "hoot owl" shifts, "I think they can clean this up pretty fast."
He said it may take several weeks, however, for all the cargo to move through rail yards and off-dock facilities. Because December is a slow period, he said "it is probably two weeks tops."
Don Pisano, who chairs the Ocean Transportation Committee of the National Industrial Transportation League, and is vice president of American Coffee Co. in Jersey City, N.J., said his firm had shipments from Vietnam, Kenya and Indonesia that are delayed because of the strike. But he added that because American Coffee kept its customers notified of the situation, he did not expect the delays to become a contractual issue.
Sandra Kennedy, president of the Retail Industry Leaders of America, a trade association representing large retailers, said the strike "stranded hundreds of millions of dollars of cargo offshore and tens of thousands of workers sat idle.
"The consequences and repercussions of this stoppage are already proving to leave an adverse impact on our economy. Even though the strike ended late last night, it will eventually result in billions of dollars of damage," she added.
Kennedy expressed concern that a strike by members of the International Longshoremen's Association who work on the East and Gulf coasts "would result in an estimated $1 billion of damage to the U.S. economy per day."
There is some speculation that the success of the the clerical union in winning concessions via a strike might embolden the leaders of the ILA and result in them taking a more aggressive posture during ongoing negotiations. The ILA and members of the group that represents management, the U. S. Maritime Alliance, are due to resume negotiations next week on a contract that originally expired Sept. 30, but has been extended to Dec. 29.
During the OCU strike, the ILA issued a statement saying it could "relate to the threat of outsourcing jobs that caused ILWU Los Angeles strike."
"ILA members who fought to protect chassis work when ILA employers outsourced the chassis pools to non-signatories to the ILA Master Contract last year can identify with ILWU Clerical Workers who went on strike," the ILA statement said. "Likewise, ILA members in Philadelphia who suffered the loss of 200 good paying jobs several years ago when Del Monte Fresh Fruits moved their operation to a vicious anti-union company, can also relate to the ugly effects of corporate greed."
Kennedy said in her letter to the ILA and USMX that "given the critical importance of port operations in the supply chain, any disruptions in that link would have a significant and cascading effect as retailers would be forced to reroute cargo to other ports, resulting in delays and significantly increased costs."
She said "As the negotiations continue, RILA strongly encourages both parties to recognize the magnitude of impact that a stoppage would have on retailers if a contract was not negotiated by the end of the month."
The National Retail Federation also wrote to the ILA and USMX urging them to "reach an immediate contract agreement before the December 29 deadline to ensure a secure and dependable supply chain along the East and Gulf Coast ports. The ILA and USMX have been locked in negotiations, assisted by the Federal Mediation and Conciliation Service."
“We understand and recognize that there are tough issues that need to be resolved,” NRF President and CEO Matthew Shay said in the letter. “The issues will only be resolved, however, by agreeing to stay at the negotiating table until a final deal is reached. Failure to reach agreement will lead to supply chain disruptions which could seriously harm the U.S. economy.
“Having a secure, long-term longshore labor contract in place is critical to ensure that the East and Gulf Coast ports continue to benefit from growing freight volumes,” he added. “Without such certainty, retailers and others will surely reevaluate their supply chains and their short-term and long-term reliance on these ports.” - Chris Dupin